Short Sale or Foreclosure?
Thursday, January 21st, 2010 | Real Estate | No Comments
Short sale or foreclosure what is the difference? Which is better for me.
Being in the real estate business and dealing with these two terms all day, it is still a little surprising that so many people are still asking that question. But then, if you have no interest in real estate you probably don’t hear much about these two and very different financial situations.
I am writing this short article with the disclaimer that I have heard from a radio program. “Handle(SP) on the law.” This is marginal legal advice. My law degree is not in the mail. The only law classes I have ever taken were in the law school – The University of Hard Knocks!
Lets deal with the term “short sale.” The only thing short about a short sale is the mortgage company gets shorted it’s money from the borrower. The mortgage company will review the sale contract and decide if it will except the partial payment to allow the seller to sell the property without encumbrances. That doesn’t mean the mortgage company actually loses money, our tax money went to AIG and AIG might reimburse the lender. Many lenders have a very long approval process. As a Realtor(R), I am supposed to explain it could take weeks to months to complete a home purchase.
A seller in a short sale frequently but not necessarily has late mortgage payments hitting their credit during the sale process. Some banks seem to encourage late payments to even allow their sale approval process to begin. So the seller’s credit score will start to decline. After the property sale is complete the seller will probably have to wait 24 months to get a new mortgage.
A foreclosure is a different animal all together. The home owner is not a seller. The lender takes the property and evicts the former owner. The bank will sell the property. If it’s note is satisfied additional proceeds may in some states, the former owner may receive the excess proceeds. The former owner will have a very negative credit item added to the credit history. Don’t expect to get another mortgage for five years!
For me personally, I feel even though a short sale can be a hassle, it is the least damaging of the three options. The foreclosure as far as I am concerned is worse than a bankruptcy. A person can get another mortgage after a bankruptcy much faster than a foreclosure if the borrower has obtained other credit and developed a good credit history after the bankruptcy.
There you have my humble explanation with very marginal and unprofessional legal advice.
Can It Be NOW is a Good Time for a Mortgage?
Friday, January 15th, 2010 | Real Estate | No Comments
Can It Be NOW is a Good Time for a Mortgage?
Buying a home
Every now and then, the economy produces a time when it is a good idea to refinance your
mortgage or purchase a home. For many, that time is now.
Low interest rates are bringing first time homebuyers out by the score and that’s driving the
resale market. Those of you on variable rates or coming off of fixed rates can benefit, too.
Today’s prime is at 2.25% compared to last year’s prime at 4.75%, or two years ago at 6.25%.
Conventional wisdom would say that now’s the time to take the money and run by lowering your payments and pocketing some cash. Instead, you could decide to keep the payments the same, and assuming nothing has changed for you in that you could afford the payments two years ago and you can still afford them today, you could shave serious time off the term of your mortgage.
Or you could still lower your payments and take some money for other things. The current
circumstances allow you the choice. Ironically, this is all a result of the recession.
In fact, homeowners facing resets on their adjustable rate mortgages or hoping to refinance into less burdensome loans may be the biggest beneficiaries of the recession. As many as two million homeowners may be facing ARM resets this year and declining interest rates hold out the hope of refinancing to an affordable fixed rate. If you bought your house with an adjustable rate mortgage, as many did, a few years back, then you want to be sure to note when it changes from a fixed rate mortgage to the adjustable rate portion. For many of you, it could be getting real close, if that time has not already occurred. Refinancing could give you a stable payment and a new interest rate, too.
While it’s impossible to predict what will happen to rates for the rest of 2009, and beyond, many mortgage professionals are advising clients to act now. Right now is the time to consider what you need to accomplish. If cash flow is a concern, why wait? Increase your cash flow by refinancing and have one less concern. With lower rates, more people are able to qualify for refinancing and more people who were left out from buying homes before will be able to do so now.
Contributor:
Ted Canto, Sr. Mortgage Consultant
We Have More Than a Year of Short Sales
Monday, December 7th, 2009 | Investment, Money, Real Estate, Statistics | No Comments
The Cromford reports that the ARMLS (Arizona Regional Multiple Listing Service – Servicing the greater Phoenix area) has 14,688 properties listed as short sale listings.
It also reports 12,162 as “Sales per Year.”
If you are looking for a home to purchase and have the time, looking specifically at short sale properties could be a good place to find your new home.
The bank owned foreclosure homes are going much faster and frequently have multiple offers.
The Buyer’s Market is Long Gone!
Monday, October 26th, 2009 | Money, Real Estate, The Economy | No Comments
As a Realtor(R), I get a kick out of the way the media is reporting the housing market. The reports are very mixed with foreclosures and housing starts. But they are not out trying to buy a house or they would be reporting a whole different story.
Just a few months ago, if a Realtor(R) was able to have a buyer in their car looking for a home, life was easy. Look at a couple of houses, take a coffee break, look at a couple more, pick the best one and put in an offer 10% below list price and you had a contract. Then over night BOOM!
I wrote and podcasted that you may have missed the market. Boy was that an understatement! I am doing things routinely now that I would have thought unethical just a little while ago. Our buyers need to be ready for a real ordeal. Last week a buyer put in an offer for a property at about $100,000. They went $5,000 over list only because that was all they could qualify for. Remember that if they can close on a house before December 1 there would be an $8,000 check to sweeten their deal .Well that was last week and almost 10 days later, NO ANSWER from the bank! There were 10 contracts on that property and no one knows if any of them will get the house. But nine of them will get closer to the drop head date and lose $8,000.
Back in the day before banks ruled the real estate system, 24-hour response time on a contract was standard. So one offer at a time would be about the maximum written. But now one offer sitting on a banker’s desk can cost my buyer big cash. Even if there wasn’t a tax credit, one contract in a week or two when it might take 15 or 20 offers to get a signed contract hurts the buyer. Interest rates might easily raise out of the range of our buyers so affordable housing is at risk with the delayed response from our friendly bankers. So that is what I see about the foreclosure side of the market.
Now that market is sweet compared to the short sale market. I have contracts were buyers are trying to buy a home putting in an offer from as long ago as JUNE!!!!!! There is one bright spot. You usually don’t hear a whole lot of complements for a bank. I have a praise for one bank that I have seen the better service than I expected, that bank is GMAC. They responded quickly waited while we negotiated with the 2nd mortgage lender and approved a sale at market price.
I guess my thoughts drifted with this post. The banks own the market and even though homes are very affordable, be prepared to look hard and put in lots of offers.
This Year’s Monthly Active Listings and Sales Price in Peoria
Saturday, October 3rd, 2009 | Investment, Real Estate, Statistics, The Economy | No Comments
This Year’s Monthly Active Listings and Median Sales Price in Peoria Arizona.
Active Listings Median Price
Jan. 1584 $180,000
Feb. 1586 $184,669
March 1580 $165,625
April 1422 $172,750
May 1231 $169,314
June 1119 $170,000
July 1015 $166,000
August 1030 $166,000
Sept. 1018 $165,000
Does it look like in March prices hit bottom and have stabilized? The inventory has been steadily declining by more than 30%. What does it mean? In today’s market, no one knows! Will things change if the tax credit isn’t extended? Are the banks intentionally holding back inventory to stop price decline? One thing that is certain, its not the best time to sell? Well, if you are moving up it might be a great time to acquire your trophy home. If your job is secure. This looks like a good year for gamblers and a very uncomfortable year for the timid.
Thank you Cromford Report.
What’s Happening in the Peoria Market Today
Thursday, October 1st, 2009 | Money, Real Estate, Statistics | No Comments
Here are a few statistics on what is happening in the Peoria Arizona market.
Normal Sales Pre-Forclosed Bank Owned
Peoria Active Listings 41.67% 44.8% 13.53%
Monthly Sales 27.91% 25.58% 46.51%
$/SF Listings $153.23 $87.29 $89.50
$/SF Sales $103.08 $88.29 $75.37
Days on Market 174 127 115
The sales to inventory shows there is 3.6 months of inventory. The market is considered a buyer’s market when the inventory is at least a 6 month inventory. These statistics are provided by “The Cromford Report.” They are the most up to the minute information providers I have been able to find.
Peoria Arizona Real Estate Agent at Work
Wednesday, September 23rd, 2009 | Investment, Money, Real Estate, The Economy | No Comments
Peoria Arizona Real Estate Agent at Work
As a Peoria Arizona real estate agent many people think I take people to see houses, write up some forms and collect an enormous check. Here are some recent activities that I feel helps my clients. The is why I love doing this kind of work. I love to help people. I hear two main reasons why people don’t buy a home. Since the average net worth of a renter was $1,500 verses $175,000 for a home owner, the economic and social improvement makes a very significant improvement to the whole family. Home owners change jobs less frequently. Their children are more likely to graduate from high school. There daughters are less likely to have children out of marriage. The benefits of home ownership goes on and on and on. This information comes from several studies. One main study was conducted by the National Association of Realtors Now getting back to the issue of as a Peoria Arizona real estate agent the reason I hear why people don’t buy a home is:
- “My credit score is too low.”
- “I just can’t afford to buy a house!”
So I as a Peoria Arizona real estate agent went and got training to coach my clients not only improve their score and how they can afford a home, but how to make their paycheck go farther than they ever thought possible. I am a Peoria Arizona Real Estate Agent not a credit repair person. The improvement in credit score is only a side benefit of the strong cash flow techniques that I as a Peoria Arizona Real Estate Agent share with my clients.
Here is an introduction to a series of videos I am creating to provide important information that many people do not know and probably don’t even know that they don’t knock.
I as a Peoria Arizona Real estate agent see my clients better able not only qualify for a better home mortgage, but since credit scores have so much to do with pricing like car insurance, health insurance, home insurance and many other monthly expenses, they save thousands every year. Here is just one part of the cash flow enhancement program.
There about 25 different ways for people to stretch their cash, get out of debt and pay off a mortgage in a small fraction of the 30 years that most people choose as a mortgage period. All these improvements can come usually with the same income and with very little cutting back on life-style spending.Here is one example of how to help improve a client’s lifestyle as a Peoria Arizona Real estate agent. I had a couple, Mr. and Mrs. Client, who were close friends in Sun City West. They were in a beautiful duplex. Mrs. Client, the wife, had impeccable taste and the property was absolutely the best home for showing in the neighborhood. They had family issues with grandchildren that made staying in Sun City West very difficult. They made up their minds to list after the majority of the valley’s retirement communities were getting ready to leave for their summer residences in cooler climates. That meant that most of the potential buyers were thinking more about going back home than purchasing a new residence in Sun City West. I as a Peoria Arizona Real estate agent created a killer visual tour.
I as a Peoria Arizona Real estate agent held open houses at various times of the day several days of the week. When I as a Peoria Arizona Real estate agent first started in March I would get about 2-3 showings. In less than 30 days almost no one would come to the door. It looked like they had missed the market and would have to take their home off the market until September when the “Snow Birds” returned. Then one couple who already owned a property in Sun City West came to view the home. They put in a very attractive offer. One of the very nice terms of the offer was that since the buyers were going back to their summer home, my clients could stay and rent their property until they were able to purchase their new home.
While all this was taking place, the Phoenix real estate market changed very rapidly. The market went from a buyer’s market to a seller’s market overnight. THey found a few properties and there offers were started on the investments they wanted were usually 10% under list price. 10% up till that time was considered a good offer. Now the tables were changed. I would take them to a property. We would put in an offer and lose it to another buyer. The sad part was that they were not so exacting to demand the absolute perfect home. They were willing to do some repairs. I as a Peoria Arizona Real estate agent would take them out to see homes three to four times a week. They started with a rather small area in Northwest Phoenix. They looked mostly in Peoria or Phoenix. All they really wanted was a home with 4 bedrooms, open floor design, an RV gate and three car garage. They also thought it would be nice if there either was a pool or a place. I as a Peoria Arizona Real estate agent had given them access to the MLS through a service called Home Scouting Report. This is one of the very few systems where the home shopper can create their own searches, save them in a password protected area, and they automatically get updates on the properties in their notebook and the MLS searches for the homes in the area. They would look every day and I as a Peoria Arizona Real estate agent would take them out to see properties. I soon found that properties were listed as active but already had contracts signed by the sellers. Many times either a bank was involved or the bank doesn’t make decision quickly. A home can only be sold once, so mostly the Mr. and Mrs. Client were wasting their time.
Day after day, I as a Peoria Arizona Real estate agent would show homes, they would put in a contract and no results. Finally, I started prescreening the listings. I wouldn’t take them to a property unless the listing agent returned a call and verified that the listing really was still available. Then came the fateful day! I wasn’t able to contact the agent for this one listing. As soon as they walked in, they were ready to put in an offer. This home had everything on the list but the RV gate! When I as a Peoria Arizona Real estate agent called the agent, he said he already had 13 offers. I asked him if my buyers could still put in an offer. He said that he would wait until I as a Peoria Arizona Real estate agent could send in an offer. I asked Mr. and Mrs. Client how high they could go and still sleep at night. In went the offer and they got it. Yea!!!!!
Now comes the part where I really do my job. Most people don’t know that a real estate transaction takes about 45 people of different occupations to get the transfer of a property done correctly. One thing I hesitate in doing is recommending other professionals. This time I recommended two service providers. The home inspector and the pool cleaner. The home inspector did a great job! I as a Peoria Arizona Real estate agent have been recommending him because he carries the equipment to find problems that other inspectors can’t find. For example, he was inspecting a home where I was the buyer agent when he found a water leak IN THE WALL. I was happy when he climbed into the attic and found missing struts. Apparently, when the air conditioning company installed the systems when the home was built nine years before this inspection, they removed some of the roof structure and didn’t replace it when they were finished.
This was a good reason to get back to the negotiating table with the bank that was selling this foreclosure. The appraisal was below our offered price and we have a structural problem. Normally, an agent would be very disappointed thinking that commissions were going to be missed because this deal could fall though. I as a Peoria Arizona Real estate agent on the other hand had already discussed with Mr. and Mrs. Client that I hoped we could find a reason to go back to the negotiation table. Since I am a Certified Negotiation Expert and had a good working relationship with an excellent listing agent, my clients not only saw the price of their new home lowered by $15,000, the bank also repaired the roof. All Mr. and Mrs. Client had to do was to clean the carpets, put in granite counter tops and paint the interior of their new home. Even though this process took several months, their new home was beautiful and they were very happy. I was very satisfied that I as a Peoria Arizona Real estate agent had helped them along the way.
Mr. and Mrs. Client had also just taken a real hit in their stock portfolio and were looking to a way to generate passive monthly income. After many conversations and soul searching they decided that I should help them find rental properties. Now I had the job of not only finding them the home of their dreams, I was to help them replace their lost monthly income. As a Peoria Arizona real estate am not qualified to implement retirement entities, so I introduced them to associates who helped them convert their IRAs and Roth IRAs to self directed so they could buy properties on their own. So while Mr. and Mrs. Client and I were looking for their new home they were also looking at investment properties. I have some experience with investment properties as well as a strong background in business. I have owned as many as three businesses in two different states simultaneously. And I also spent nine years consulting with small business. I knew how to put together a business plan. The Clients really couldn’t make up their minds if they were looking for single or multi-family units. They had decided on real estate as investment because the market had dropped so far that great deals were available and positive cash flow was attainable. The Clients already have another rental property and knew many of the challenges with rental properties. When the finally moved into their new home, they were ready for a rest they have a duplex ready to renovate and a short sale offer on a nice townhouse.
Keeping up with the numbers is critical, especially in a volatile market like we are seeing today. As Peoria Arizona real estate agent, I have found “The Cromford Report” to be a great tool. Here is a short city comparison for Septemver 22, 2009
Price per Sq. Ft. Peoria, AZ $87.24 Glendale, AZ $70.89 Avondale, AZ $57.64
Annual Appreciation Peoria, AZ -20.4 Glendale, AZ -26.6 Avondale, AZ -31.5
Days on Market Peoria, AZ 111 Glendale, AZ 80 Avondale, AZ 67
Average Sq Ft. Peoria, AZ 2106 Glendale, AZ 1829
Avondale, AZ 1954
As you can see, a real estate agent does more than show homes and do paperwork.
Secret Tools to Stretch Your Paycheck Part 1
Tuesday, September 8th, 2009 | Investment, Money, Safety, The Economy | 3 Comments
Here is a quick and easy secret tool to stretch your paycheck. Many people are finding that they can’t seem to save any money or lower their debt. Foreclosures and bankruptcies are at record highs. Unemployment looks like it is going to get worse before it gets better.
There are several tools that you can use to take control of the cash you have coming into the household. When I began showing my clients some the these tools they are amazed that they didn’t know that they didn’t know. They all believed that they were doing all they could do with the money they made. They are always surprised to see just how much more they could do with just one or two secret tools and how far it stretched their paycheck.
One well hidden secret is YOUR CHECKING ACCOUNT IS NOT A GOOD TOOL! A personal line of credit PLOC or LOC is a tool that can give considerable flexibility in stretching the paycheck to those wage earners with a good payment history. The easiest LOC to get is usually with the same bank as your checking account. An example of how to use this tool is shown on the video; If you can’t get a line of credit we will be showing alternatives that will give your the ability to stretch your paycheck too.
Save Money with a Higher Credit Score
Friday, August 14th, 2009 | Real Estate | No Comments
You could be making an expensive mistake with your credit and not even know it. But here are two easy fixes.
10 Healthiest School Lunch Plans
Tuesday, August 11th, 2009 | Real Estate | No Comments
by Debra Ronca
GuyKawasaki twittered this article to me. There is some very interesting content.
With childhood obesity and diabetes on the rise, it’s clear our kids need healthier eating habits. Establishing these behaviors early in life can lead to healthier eating as an adult. And what better place to start learning good habits than in school?
